The 50-day exponential moving average (EMA) of Bitcoin has fallen below the 200-day EMA, indicating a loss of the previously formed golden cross. On Friday, the Bitcoin price dropped to $77,438, although it reached a high of $79,837 during the day. The asset is trading around $77,438, still 1.19% higher for the day, but significantly below the intraday high. The daily candle has not yet closed, so the picture may change by the close. The pullback occurred amid rising expectations of a rate hike at the next Fed meeting: the probability of such an event has increased to 86%.
Consumer Price Index (CPI) data showed that the core monthly figure was 0.3%, exceeding analysts' expectations of 0.2%. The probability of a 25 basis point rate hike was around 69% immediately after the data release, but then rose to 86.5%. A rate hike typically precedes a 'risk-off' movement, meaning that risky assets like Bitcoin and tech stocks will suffer if the Fed decides to raise rates. The daily Bitcoin candle opened at $76,529, reached an intraday high of $79,837, then retraced to a low of $76,040 before settling around $77,438.
This circular route was enough to switch the daily EMA reading back to bearish: the 50-day EMA briefly crossed the 200-day on Friday. This formation, which traders call a golden cross, is the most bullish of chart patterns, and Bitcoin has not seen it since November of last year. But it was short-lived: the 50-day average has fallen back below, meaning prices are still just inches away from the golden cross.
A golden cross forms when a shorter moving average crosses above a longer one. It is one of the most closely watched trend signals because historically it has preceded some significant Bitcoin rallies.
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